YPSILANTI, MI - The Eastern Michigan University Board of Regents approved a new agreement to monetize its parking system on campus during its meeting Friday, Dec. 15.

The 35-year agreement provides an up-front capital payment of $55 million from the contractors to the university in an effort to bolster the university's finances.

EMU has selected Dallas-based Preston Hollow Capital as its concessionaire under the agreement. LAZ Parking, which operates more than 2,500 parking locations across the U.S., was selected as its parking operator.

Under the agreement, EMU will transfer all parking operations in exchange for the upfront payment, which would help fund long-term investments in academic facilities and programs, according to the university.

EMU Chief Financial Officer Michael Valdes said the bidding and fact-finding process led to a choice of vendor that fits what the university was looking for.

"That group really worked very hard to come to a conclusion that yields the maximum financial value while providing a great parking operator for the university," Valdes said.

"They're probably the most experienced firm in the space of public-private partnerships," Valdes said of LAZ Parking, which has handled Ohio State University's parking operations since 2012, after OSU approved a $483 million long-term lease and concession agreement.

In addition to the up-front capital payment, Preston Hollow has committed to spend $4.2 million in capital expenditures to enhance parking on campus in the first two years of the agreement, Valdes noted.

A key aspect of the agreement is the limitation of future parking rate increases, Valdes said.

Over the past seven years, the average annual parking rate increase at EMU has been 7.2 percent, Valdes said. Within the first five years of the agreement, EMU will not raise parking rates by more than 5 percent in any given year.

Following approval, Valdes said he expected EMU to sign the agreement by the end of the year.

EMU budgeted for $4.5 million in parking revenue for the 2017 fiscal year, EMU spokesman Geoff Larcom said, with revenue generated from guest parking and the payment of tickets and fines. The university currently employs five people for its parking operations, in addition to a number of student employees.

Valdes said the concessionaire has the option to interview all current parking staff at EMU, although there is no guarantee whether they would be offered positions. All staff within parking operations at EMU are represented by bargaining units.

Student workers in parking operations, who primarily work in parking enforcement, will likely be phased out of those positions as the contract progresses, Valdes said.

"Over the length of this agreement, I would expect that enforcement would move from what currently is a very manual process to be one that is really technology driven," Valdes said. "I would expect there to be less student activity associated with enforcement over time."

In June, EMU issued a request for qualification (RFQ) of interested partners expected for a formal bidding process.

EMU, which has more than 21,000 students, has more than 9,700 parking spaces spread over two garages, 36 parking lots and 179 meters on its Ypsilanti campus.

Revenues generated at athletic events like football games at Rynearson Stadium and the EMU Convocation Center would be subject to the new agreement.

OSU estimated the initial $483 million will result in $3.1 billion in investment earnings by the end of the 50-year agreement, according to the university. The contract CampusParc has with Ohio State caps annual permit increases at a maximum of a 5.5 percent increase for the first 10 years of the contract.